Main Street Monday — Small Business Lending Growth Stalls

By Bob Coleman
Editor, Main Street Monday

Main Street Monday — Small Business Lending Growth Stalls

U.S. small business borrowing fell in December from a year earlier.

“What started as a full gallop in 2015 is barely trotting along now,” said Bill Phelan, President of PayNet. “We are barely replacing worn-out assets here.”

Small businesses “are settling in for a long time in waiting for what they view as a difficult situation to come to an end,” Phelan said. “I don’t think it’s time to break the glass and pull the alarm yet, because financial health got better.”

The PayNet index typically corresponds to U.S. gross domestic product growth a quarter or two ahead, with Monday’s figures spelling further slowing but probably not recession in the first part of this year, Phelan said.

Reports Thompson Reuters

Dropping oil prices and slowing world growth are taking a toll on U.S. economic growth, which slowed to a 0.7 percent.

Lending slowed sharply to small businesses in mining and agriculture, as well as in wholesale trade, transportation and construction, the figures showed. Texas was particularly hard hit.

The delinquency rate on loans more than 30 days past due ticked down in December to match a record low of 1.44 percent, separate data from PayNet showed.

PayNet collects real-time loan information such as originations and delinquencies from more than 325 leading U.S. lenders.

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